The Donald J. Trump Foundation was a New York–based tax-exempt private foundation formed in 1988 by Donald Trump and dissolved by court order in 2018 after various legal violations came to light.
The foundation was created to receive royalties from Trump's 1987 book Trump: The Art of the Deal as well as donations from others, for the stated purpose of distributing the funds to charitable causes. Trump's children Ivanka, Eric, and Donald Jr. served on the board, which did not meet after 1999.[2] Trump stopped contributing to the foundation in 2008, but continued to solicit donations.[3]
The foundation's activities came under scrutiny during the 2016 presidential election campaign, initially by The Washington Post's David Fahrenthold. Law enforcement investigators subsequently discovered various ethical and legal violations, including failure to register in New York, self-dealing and illegal campaign contributions.[4][5][6] In December 2016, Trump tried to dissolve the foundation, but the New York State Attorney General's office blocked dissolution pending completion of its investigations.[7] Trump served as its president until January 2017, three days after his inauguration as U.S. president.
On June 14, 2018, New York attorney general Barbara Underwood filed a civil suit against the foundation, Trump himself, and Trump's adult children—Ivanka, Eric and Donald Jr.—alleging "a shocking pattern of illegality" with respect to the foundation's money.[8][9][10] On December 18, 2018, Underwood announced that the foundation had agreed to shut down under court supervision and distribute its remaining assets to court-approved charities, although she did not end investigations of the foundation and its directors.[11] In November 2019, Trump admitted to using the foundation for his business and political purposes and was ordered to pay $2 million as restitution.[12][13] Additionally, Trump was required to reimburse $11,525 to the foundation, which was added to $1,797,598.30 already in the foundation's bank account. The money as well as the funds in the foundation's bank were paid to eight charities in December 2019.[14]
The winding down of the foundation and the settlement did not end investigations of the foundation and its directors nor resolve any other potential prosecutions of Trump and others arising from the dealings by or through the foundation. On February 22, 2021, the Supreme Court in Trump v. Vance rejected any further delay in the production of Trump's tax records by Trump's accountants Mazars, under an August 2019 subpoena.[15] Mazars handed over to Vance millions of pages of documents containing Trump's tax returns from January 2011 to August 2019, as well as financial statements, engagement agreements, documents relating to the preparation and review of tax returns, and work papers and communications related to the tax returns.[16]
Overview
Stated purpose and structure
Donald Trump formed the Donald J. Trump Foundation in 1988 as a private foundation.[17][18][19] Its initial stated purpose was to distribute proceeds from Trump's book,Trump: The Art of the Deal, to charitable causes.[20][21] Like many other private foundations, the Trump Foundation conducted no charitable programs of its own, instead granting money to other tax-exempt organizations.[22]
Investigations by The Washington Post and others
During the 2016 U.S. presidential election, David Fahrenthold of The Washington Post began looking into Trump's history of charitable giving. In January 2016, Trump held a fundraiser for veterans' causes in lieu of appearing at a televised Republican debate. He claimed that the event raised $6 million, including $1 million of his own money.[44][45] Fahrenthold began his investigation by attempting to verify the receipt and disbursal of the $6 million. All donations were supposed to have gone into the Trump Foundation and then granted by the foundation to others. Fahrenthold determined instead that, several months after the rally, the Trump Foundation had yet to disburse funds to any veteran-related charities. Although some of the funds went directly to causes without passing through the Trump Foundation, Fahrenthold widened his investigation into a larger investigation into Trump's history of charitable giving. In the November 2019 settlement ordering Trump to pay $2 million in damages, he acknowledged that the veterans' fundraiser had been a campaign event and that his campaign had been given full control of the raised funds.[46]
In June 2016, in response to criticism, Trump asserted publicly that he had given about $102 million to charitable causes from 2009 through 2015[47]
Legal and ethical controversies
Accusations against Trump and his foundation include the following:
Failure to maintain proper governance
In a June 2018 petition filed by the office of the New York attorney general, it was explained that: "...none of the Foundation's expenditures or activities were approved by its Board of Directors. The investigation found that the Board existed in name only: it did not meet after 1999; it did not set policy or criteria for choosing grant recipients, and it did not approve of any grants. Mr. Trump alone made all decisions related to the Foundation.[53]"
In an exhibit attached to the filing, Trump Foundation treasurer Allen Weisselberg claimed he had not been aware that he was the treasurer or on the board of the foundation until he was approached by investigators.[24]
Solicitation of donations without a license
Under New York State law, a not-for-profit foundation must register as a "7A Charitable Organization" if it plans to solicit outside donations over $25,000 in any year.
Legal actions and closure
Intended dissolution of the Trump Foundation
In September and October 2016 there were several legal actions and complaints filed against the Trump Foundation. The former head of the Internal Revenue Service's Office of Exempt Organizations Division Marc Owens told The Washington Post regarding the various allegations against the foundation: "This is so bizarre, this laundry list of issues... It's the first time I've ever seen this, and I've been doing this for 25 years in the IRS, and 40 years total."[107]
In late December 2016, one month before his inauguration, Trump announced that he would dissolve the Trump Foundation to avoid "even the appearance of any conflict with [his] role as President".[37] However, a spokesperson from the New York State attorney general's office told The New York Times, the same month, that the foundation "cannot legally dissolve" until its current investigation is completed.[38]
Investigation by New York State attorney general's office
See also
- Eric Trump Foundation
- List of grants made by the Donald J. Trump Foundation
- Slush fund
References
- Form 990 2015 ProPublica, May 9, 2013, retrieved 18 December 2018^
- Philip Hackney. Trump's charity woes are uncommon, if not unprecedented, and could get more costly The Conversation, November 9, 2019, retrieved March 13, 2021^
- Donald Trump's troubled charity foundation to shut down